Council Selects Landry’s, Locals for $100 Million-Plus River Barge Contract

Local restaurateur Lisa Wong (left) and local businesswoman Hope Andrade react to City Council's vote in favor of their bid for the river barge operation contract.

Updated May 25, 2017

San Antonio City Council voted 10-1 Thursday to award Go Rio San Antonio, a locally owned company working with Houston-based Landry’s, the multimillion contract to operate the City’s new fleet of river barges.

Council voted against City staff’s recommendation to give the contract to Chicago-based Entertainment Cruises, doing business locally as San Antonio River Cruises.But most Council members cited City policies that favor small, local, and minority-owned businesses as justification for their vote.

“I went into this process with an open mind,” Mayor Ivy Taylor said before the vote. “There was no single factor that I consider more important than others. …. [But voting for Entertainment Cruises] would send a contradictory message to the one that we made when we approved those policies.”

Councilman Ron Nirenberg (D8), who is opposing Taylor in the June 10 runoff election, cast the sole vote against awarding the contract to Go Rio because he agreed with City staff’s opinion that Entertainment Cruises was the better, more experienced company.

“There is a reason why Council isn’t involved in these procedures,” Nirenberg said, because the process becomes politicized. He was referring to the mayor’s abrupt halt of the previous round of proposals and the abnormal practice of letting the top two teams out of five give presentations to Council. “I have great confidence” in City staff and the citizen selection committee, which gave Entertainment Cruises overwhelmingly more points for experience and quality of proposal.

Click here to download the presentation composed by City staff for Thursday’s Council meeting.

The vote came after hours of citizen testimony that focused largely on local versus out-of-town management, weeks of aggressive marketing and social media campaigns from various firms that applied for the contract, and years of City processes that have been scrapped, restarted, and debated.

Members and supporters of the local team burst into applause when the vote results were displayed in Council chambers. VIA Metropolitan Transit Chair Hope Andrade, a majority owner of Go Rio along with local restaurateur Lisa Wong, was in tears after the vote.

“Hope and I are long-time San Antonians, we love our city, and we knew with a great operating partner like Landry’s we would be the best team,” Wong told reporters after the vote.

Houston-based Landry’s owns and operates more than 500 hospitality, dining, and entertainment properties nationwide, including the Rainforest Cafe on the San Antonio River and the Chart House Restaurant atop the Tower of the Americas.

Former Texas Secretary of State and current VIA Metropolitan Transit board Chair Hope Andrade (left) and Local restaurateur Lisa Wong ask City Council to vote in favor of their river barge bid.

Bonnie Arbittier / Rivard Report

Political consultant Christian Archer (left) and Entertainment Cruises CEO Kenneth Svendsen have a conversation before the City Council meeting begins.

The saga isn’t quite over yet. The Go Rio team has 30 days to negotiate with the City specific terms of the 10-year deal that is estimated to be worth more than $100 million. The City wants the new operator to be in the water by Oct.1, replacing Rio San Antonio Cruises‘ operations and barges as its contract expires at the end of September.

“We’ve already got our marching orders,” Wong said, adding that they will be fine-tuning the details of operation and possibly incorporating some new ideas and feedback from the community and Council. “That’s all part of negotiations. … We want to make sure that our programming is consistent with what they want.”

Entertainment Cruises scored one point less than its locally owned competitor on a City contract scoring matrix that gives extra points for small, local, veteran-, or minority-owned businesses.

Bonnie Arbittier / Rivard Report

Members of the Entertainment Cruises team (From left) Chef Johnny Hernandez, Chelsea’s Catering and Bar Service President Tony Gradney, and Entertainment Cruises Vice President of Engagement and Innovation Paul Sanett encourage each other during the City Council meeting.

Entertainment Cruises’ ability to scale, its access to resources and other markets, and overall experience operating in 10 cities for more than 28 years made it the frontrunner for City staff, said Assistant City Manager Carlos Contreras. It’s not the first time that the City has set aside Small Business Economic Development Advocacy and local preference points to favor an out-of-town company in the interests of long term benefits to the city.

Entertainment Cruises was committed to hiring several local partners including Chef Johnny Hernandez, Chelsea’s Catering and Bar Service President Tony Gradney, SWEB Development CEO Magaly Chocano, Tri-starr Personnel CEO Candace Hawkins, and Melissa Aguillon of local public relations and marking firm Aguillon & Associates.

I asked Kenneth Svendsen, CEO of Entertainment Cruises, after the vote if he was surprised by the results.

“You have to be surprised when multiple times an independent committee – two different ones – loud and clear said that when it came to experience, financial capability, and delivering [cruise] experiences … that we are the best ones to operate it,” he said, “of course you have to respect that.”

Despite the loss, he said their company’s participation in the process elevated the competition.

“I think San Antonio won today, even though it wasn’t won by us,” Svendsen said. “Our team … they have pushed and pushed for innovation and everyone has seen it showcased. And today the mayor and the Council have seen what this could be. Shouldn’t that matter more than who gets to do it?”

Go Rio was ranked third out of five companies, according to the matrix, with 53.88 points before the local/minority preference points were applied. Once they were, they received 17.55 additional points for a total of 71.43 points. Entertainment Cruises scored a 70.41 on the matrix without any preference ratings.

The River Walk hosts more than 11.5 million visitors per year, and about 1.4 million utilize the barges that motor up and down the San Antonio River, according to City staff. The City wants to increase the use and enhance the experience for locals and visitors alike, especially when it celebrates 300 years in 2018.

“I was not sent here to be a rubber stamp for the City staff,” said Councilman Joe Krier (D9), acknowledging that he does agree with staff “95%” of the time. When the SBEDA and local preference policies were created, however, “we did not say we will do that unless it’s a really really big contract.”

Bonnie Arbittier / Rivard Report

Supporters of Buena Vista Barges stand at the back of City Council chambers with signs of support for the local river barge contract bidder.

George Mery, the owner of Elegant Limousine, teamed up with several other local firms, also submitted a bid that came in third place with local preference points to total 65.52. Several supporters of Mery and Associates, also known as Buena Vista Barges, spoke out against the process in which they and two other contenders weren’t allowed to present their proposals to Council.

The current river barge operator’s proposal ranked fourth out of five.

Pat Boone of Rio San Antonio Cruises addressed Council on Thursday, but did not ask for their vote, just that they keep the operation local.

“We have farmed out the design of this boat, we have farmed out the production of this boat, and now we’re getting ready to consider farming out the operation of this boat,” Boone said.

Late Thursday afternoon, both Nirenberg’s and Taylor’s campaign released statements attacking each other.

“It is shameful that politics won out over the public interest today,” Nirenberg stated. “Twice, a transparent and fair process selected the best company and twice Mayor Taylor intervened to rig the process in favor of a political ally. Although I remain hopeful that Go Rio San Antonio will be able to create a quality experience, these actions diminish public trust and have a chilling effect on businesses and individuals looking to invest in San Antonio.”

Taylor’s campaign offered several comments, including:

“Chalk up another failure of leadership for Councilman Nirenberg. He wants to be mayor of our City, but today he said through his vote on the River Barge concession that our people don’t have the talent or skill to handle a major contract. Not surprisingly, Nirenberg was once again the lone ‘no’ vote on City Council.

“Mayor Taylor believes in the ability and talent of San Antonio’s small-, women-, veteran- and minority-owned businesses. That’s a key reason she supported the Go Rio San Antonio team, which a committee of citizens and stakeholders ranked first in the selection process.”

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Let’s not forget: In the first round, Chicago scored miles ahead of Go Rio. Ivy Taylor did not like the outcome (perhaps because she’s friends with Hope Andrade), complained about Hardberger’s role (which was perfectly legal according to staff), and forced a second round.

Frustrated by this outcome. I do not feel the best company was awarded the contract. I’m hoping San Antonio has not missed an opportunity to elevate the river barge experience; but it sure feels like we have.

While a lot of emphasis has been put on whether or not Go Rio really deserved the tag of “local,” not enough has been said about the importance of that value in and of itself. While it sounds great to celebrate the “local” and this resonates well with voters, the emphasis on localism has a darker side that I don’t think a lot of “locals” really understand.

In the 21st century, companies and talent are mobile and innovation drives economic growth. San Antonio should be eager to attract and retain the best and the brightest companies and people it can. You can’t do this if you are going to consistently pick the “local” over the “best and the brightest.” This is true of the river barge but also true across the spectrum.

There are some deeper cultural issues at play here that are likely evident to most people who have spent significant time in other cities and really deserve some broader discussion. I would sum it up this way: San Antonio can seem many times like a hotbed of nepotism and insider deals but rarely ever as a hotbed of innovation. I would also note that those issues are more than a little bit related.

If any good can come of the debacle of this River Barge contract, it has to be exposing the dark side of localism and promoting a serious discussion about the future. Hopefully, there are enough people in the city committed to excellence over localism to make a change.

At the end of the day, it would appear the Council selected a proposal judged less qualified on all counts merely because they were “local.” The net result is that a couple influential “locals” will make a lot of money but one of San Antonio’s signature attractions will be less than if could have been.

This hits the nail on the head. We cannot lose our identity and culture, I get that, but localism has long held us back, kept us looking inward, and stagnated innovation in San Antonio. As someone who previously lived in Austin, it can be frustrating to watch San Antonio shoot itself in the foot time and time again due to leadership that refuses to believe there is anything to be learned from other cities. This vote signals to me that our council is out of touch and unwilling to challenge the status quo for the greater good of elevating our city over the same old backroom politics, kitschy Riverwalk, tourist-oriented attractions and economic incentives for call centers. I will be changing my vote during the runoffs in favor of new leaders.

Seriously!!
Our world has much bigger problems, eating dinner on the SA river is not even in the top million. Spend your time in prayer for our nation and its security so we can continue to enjoy living in a free country.

I do not understand why the City keeps recruiting outside firms to handle so many of the entertainment venues in the city. San Antonio is a unique city and having outsiders trying to change us to look like where they came from is just wrong. Good or Bad, local people understand that this beautiful city is a Big City with a small town atmosphere and that is what appeals to so many of the millions of visitors who come here every year. If they wanted a Big Loud City they would go somewhere else.

It’s a shame, because my family has a tradition of riding the barges during the Christmas season… but that is just because of the lights. I was looking forward to the possibility of additional rides (and food!) during other times of the year.

Johnny Hernandez did not have a contract with the Chicago team. They had the opportunity to have Johnny join in before their presentation to achieve those minority points, and they missed it. They would have won if they played the game by the rules. Meanwhile, Lisa Wong is also a prominent restaurateur in San Antonio. In the end, I feel confident this was a win win for San Antonio, and look forward to what will happen to the river moving forward.

Frankly, I am shocked at the amount of media coverage this whole process got. Irrespective of who runs it, it’s going to be largely the same experience for your average vacationer and it will certainly be a sufficient one, given the context.

The ‘local’ part is a total farce and whether it’s run by a conglomerate from Chicago or from Landry’s, I don’t think it really matters.

I hope it won’t be only Landry’s restaurants running the barge dinners – surely they will bring in some of our excellent, truly local chefs and restaurants. Landry’s restaurants are schlocky chain restaurants and frankly don’t come close to our local chefs.

The next time Taylor and the Council complain that SA isn’t being taken seriously as a big city, remember this event. Remember that they picked an untested, untried, inexperienced outfit because they were “local” rather than an experienced operator with widespread industry contacts that could have led to nationwide cross-promotional opportunities and much more visibility.

This type of idiocy is *precisely* why SA will always be seen as a third-rate jumped-up cow town. Keep up the good work, everyone!

Cow-town -huh?? San Antonio has developed into a lovely, progressive , innovative, high tech, and yet full of charm with a “small town flair” city. Our River is a huge part of this city and thru the years has become an inviting draw for locals and out of town vacationers. Too bad some people do not appreciate San Antonio’s charm and it’s continued economic growth. Hardly a “cow town”! It is with much respect that I appreciate the mayor and council (except for the one Council member) members for voting not only “local”, but for highly qualified business women with excellent business standing in the community and beyond. Their excellent work ethic and drive to achieve success is well known. Why setup a format that will help local business compete with out of town
companies-for city contracts-if you will Not Use It as it was meant to be used.
San Antonio has many talented, hard working, driven, successful and intelligent citizens-that have successful careers-that is not exclusive to “out of town” business companies. This City Council IS San Antonio’s City Council-voted into office by the citizens of San Antonio-congratulations to them for
awarding this big business contract to well qualified, hard working, intelligent
business citizens of this beautiful city. This has shown San Antonians that our city leaders are interested in providing opportunities for business growth to well qualified, experienced and hard working LOCAL businesses that bring prosperity to our citizens and to our great city. KEEP UP THE GOOD WORK!

This kind of cheerleading won’t change the fact of how San Antonio is perceived by the outside world. In is a fantasy to say that we are seen as innovative or high tech. Low-income backward laggard is more like it. I do agree on the lovely, charming part but I’m not sure how well that is known.

Question, why should local companies need help to compete? Are you suggesting that San Antonio can’t compete against the outside world? You would think that the “locals” should already have a leg up on the competition by knowing the local terrain. There are some inherent advantages to being local. In this case, however, the “locals” could only muster a third place proposal that I haven’t really heard anyone praise objectively. The only thing anyone talks about in a positive way about the proposal is the fact that they were “local.” Are you excited about the duck mascot? What that idea say about the orientation of the people developing the proposal?

Beyond the questions about the convenience of the Landry team ownership structure, the City scoring system also awarded Landry’s 2.5 points for being “local” because they apparently have an office here. Why should that matter more that the quality of the vision, track record, etc.? What a farce.

This is certainly a good thing for the two individuals who will profit handsomely from this endeavor but how exactly does that help the other couple million people living here? How exactly has the City Council done something to benefit those folks?

One interesting fact about the “local” company is that were not the company that was offering to reduce rates for “locals” to take the tours and use the river taxi. As a “local”, I find this puzzling and wish there was more attention paid to the fact that the “out of town” company was actually intending to offer their product to locals instead of just tourists. The “local” company also appears to have been the one looking to cater solely to tourists and present a stereotypical tourist centered image of the city instead of an authentic “local” one.

Certainly, some political jockeying in this decision. “Local over Excellence” at this scale is not the way to improve economic growth and prosperity for SA. The Chicago team was set to use local businesses within their plan that caters to all types of visitors giving them an unforgettable experience.
The decision was unethical and one that I have witnessed and experienced several times as a business owner in this city. SA continues to keep within itself thus creating an illusion of growth. I moved my business to DFW and have grown over 80% across the US. Born and raised in SA but nothing changes. Such a beautiful city with a corrupt politcal base.

If you don’t like minorities, veterans or women getting points in bids for city contracts, then change the rules. Don’t come after the fact and then complain. You sound like the anarchists who were complaining after the Fall election results that the electoral college should not be the rule of election. What do you have left but screaming and cursing in the streets because you don’t like the outcome that you don’t like. Perhaps you skipped government class to make protest signs?